Question

Looking at the topic of compensation. In order to address equity a firm must be able to determine the relative worth of its jobs thru job evaluation. Explain the four common job evaluation approaches.

Answer 1

Jobs evaluation are done using various methods. 4 common methods are

1. Ranking method: In this methods jobs are compared with each other and are given rankings . According to the ranks given the salary of each job is decided asper ranks. Though it is the simplest method of evaluation it lacks any specifications and hence is unmanageable.

2. Grading method: In this method jobs are given grades according to some guidelines provided . Each job is compared tot he guidelines and the grades are given accordingly . The salaries are provided as per those grades. This method cannot deal with complex jobs.

3.Points; Points are given to each job based on various factors like skill, knowledge ,effort etc., All these points are added to get the final score which is then graded. All the jobs with similar points are given similar payscales. This is the most common method which is simple but covers all the factors which are important for the job.

4.Factor comparision method: This method is a combination of ranking metho and points method. Jobs are evaluated by breaking them into factors and giving points and also ranking them as a whole. In this all the disadvantages are covered and is accurate.